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US unemployment rises by 2.4m despite easing of coronavirus lockdowns | Business

Another 2.4 million Americans filed for unemployment insurance last week even as states across the US began opening up for business again, betting that the coronavirus pandemic is now under control.

The latest figures from the Department of Labor mean close to 39 million Americans have lost their jobs in just nine weeks. The rate of weekly losses has slowed sharply from its peak of 6.6m at the start of April but remains at levels unseen since the 1930s Great Depression.

unemployment claims graph

This week the treasury secretary, Steven Mnuchin, said he expects unemployment to continue to rise as the pandemic takes its toll but warned of “permanent damage” to the economy if the lockdowns continue too long.

The weekly jobless claims are seen as a proxy for layoffs but they do not necessarily give the most accurate picture of the unemployment situation. A claim is an application for unemployment benefits and not every person who is laid off immediately applies for benefits. The weekly unemployment claims are also still being impacted by a backlog collapse of claims that overwhelmed many state systems.

The official unemployment rate is now 14.7%, the worst since records began. A decade’s worth of job gains have been wiped out and most economists believe the real figure is higher and expect unemployment to rise to well above 20% in the coming months.

All the states have now begun lifting quarantine restrictions to some extent but polls show the majority of Americans are worried about the return to work and many businesses remain closed.

Aya Rabbaa, 19, lost her job at an iHop restaurant in Madison, Wisconsin, eight weeks ago and only received her benefits three days ago. “I would call and hang on hold for hours or they would hang up,” she said.

The college student relied on her wages to pay her expenses and said it had been a real struggle while she waited on the money. “They need to do something,” she said. “People are hungry, people are stressed. Do we live in a third world country or what?”

Now Wisconsin is open for business again after its supreme court struck down the state’s stay-at-home order. Rabbaa said she was worried about going back to work if and when the restaurant opens for business. “I’d go back but I am scared,” she said. “It’s still not safe. If I get it then the customers will get it and if they have it, I will get it.”

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